In the New Keynesian Open Economy Model, an Increase in the Tariff

question 4

Multiple Choice

In the New Keynesian open economy model, an increase in the tariff imposed by the rest of the world on the exports of the SOE causes

• A)the demand for imports to rise.
• B)the demand for imports to fall.
• C)the demand for exports to rise.
• D)the demand for net exports to rise.
• E)the demand for exports to fall.

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Definitions:

Reject

To refuse to accept, submit to, believe, or make use of something.

Perfect Tender Rule

Requirement that the seller deliver the goods in conformity with the contract, down to the last detail.

Local

Pertaining to or occurring in a particular area, community, or jurisdiction, not widespread or general.

Ordinance

A law or regulation made by a local government or authority.